One of the highlights of the sporting calendar for the Insurance Institute of the Northern Gauteng is the Annual Golf Day. This year the event, held at the Wingate Park Country Club, was bigger than the previous one and well supported by our members, sponsors, and VIP guests. To make this day a success we need sponsors, and this year we were privileged to have more than one sponsor.

The main sponsor was Hollard Insurance Company. A big thank you goes to Johan Prinsloo and his team from the Pretoria office. Hollard sponsored all the green fees. No Golf Day of this nature is fun without more sponsors and watering holes.

King Price insurance also made sure the golfers had a fun day and sponsored a Juke Box for the day. The music started early and as more golfers arrived the ‘Gees’ just got better. Other contributors were C-Track, Tracker, Miway, Epic Underwriting managers, Apollo Tyres, and Mirabilis. The IING would like to thank each sponsor.

The feedback received from the players was that everyone had a fantastic day. The Wingate golf course is always in pristine condition. A major thank you goes to Trevor Pole and his team for hosting us. I am sure next year will be as fun and successful as this year’s event. The competition was a 4-ball alliance with two scores to count on all the holes. Well done to each player!

The day is all about having fun, and the prize giving was an informal event which took place in the bar area with everyone enjoying a drink or two. The evening ended with dinner, music and socialising.

We had the privilege of hosting our second annual executive whisky tasting evening on the 18th of July 2017 at Moonshot Café in Menlyn. It is an exclusive event aimed at executives from both insurers and suppliers in the industry. We were glad to see a significant increase in participants this year, many who joined us last year as well.

Sean and Carl from The Whisky Rebellion in Johannesburg hosted once more the evening. Both have a wealth of whisky knowledge and add something unique and exciting in the form of their tasting experiences.

Our tasting on the evening was the Windows to the World, which introduced us to six whiskies from six different countries. All participants enjoyed the tasting. Whether you were a whisky connoisseur or novice, it did not matter. The guests were able to engage the hosts with interesting questions on the different whiskies being tasted. We even had blindfolds and fudge to spice things up!

It was not all about the tasting. The executives had the opportunity to network with like-minded colleagues within the industry and made new contacts.

Overall it was a delightful evening, and we hope to see some of you at the next year’s event!

Analysts warn the twin disasters of Knysna fires and the storm that hit Cape Town will put pressure on the insurance business.

Photo caption: Picking up the pieces: Rain brought some relief to Garden Route where fires gutted parts of Knysna and Plettenberg Bay. In the picture, Michelle Kruger, with her daughter Bianca, 15 and son David, 7, inspect their destroyed property in Gardner Kloof, Knysna. Picture: THE HERALD

South Africa’s insurers are bracing for an influx of claims, expected to increase after the outbreak of fires in Knysna damaged property worth millions of Rands and resulted in the evacuation of about 10,000 people from their homes.

Analysts on Thursday said the twin disasters of fires in the coastal town of Knysna and the storm that hit Cape Town this week would put pressure on the insurance business, although a cushion would be provided by reinsurance cover taken out by insurers. Reinsurance cover is insurance for insurers and is the practice of insurers transferring portions of risk portfolios to other parties.

“The fires and storm will be claimed as an event and would be covered under the reinsurance cover which insurers are part of. Insurance companies like Santam have reinsurance cover in place, and that limits insurers like Santam’s losses to a cap amount. This varies around R50m and R100m per catastrophic event like the recent floods or fires,” said Adrian Cloete, portfolio manager at PSG Wealth.

The insurers are already being battered by an economy that slipped into a recession in the first quarter, the country’s credit-rating downgrade to junk status, continued political turmoil and unemployment at a fourteen-year high.

Another analyst who asked not to be named said that insurers must “expect large claims,” although the extent would only be quantified once the full-scale of property damages was known.

Like the rest of the sectors in the country, the insurance industry has not been spared the economic headwinds from a recession, a dip in foreign investor confidence and political uncertainty from leadership wrangles in the ruling party.

“The biggest share price driver for these companies is the growth in net asset value over time, and this metric will only very marginally be impacted by these events,” he said.

The Western Cape Disaster Management Centre said the Knysna fires were one of the most destructive blazes in recent memory. More than twenty-six fires broke out late on Wednesday, with “severe devastation” in at least twelve suburbs.

Eight people have been killed, three of them in the Knysna area, as the worst storm to hit Cape Town in three decades hit the town on Tuesday before hurtling eastwards along the Garden Route.

“Humanitarian support is being coordinated for an estimated 8,000 to 10,000 residents of the greater Knysna area, after devastating fires,” said James-Brent Styan, spokesman for the Western Cape local government ministry.

The wildfires, driven by winds in excess of 50km/h, destroyed property in twenty suburbs as buses were sent to evacuate trapped residents in the tourist town.

According to the South African Weather Service, 37mm of rain fell at Cape Town airport. Other areas recorded as much as 131mm.

Meanwhile, corporate organisations are assisting Knysna residents with donations running into millions of Rands as well as foodstuff.

Checkers, Woolworths, DHL, and Massmart are among the large pool of corporates that have assisted. Outsurance said it had donated R250,000 to the Gift of the Givers to assist in relief efforts.

The machines are already proving handy in many fields, though there are air-safety concerns and lawmakers have not caught up.

If ever there was a need for drones to provide quick aerial information to firefighters, police, and paramedics over a large area in South Africa, then the recent raging bushfires across swathes of the Garden Route fitted that bill.

There is drone footage of the devastation running up the coast from Sedgefield to Plettenberg Bay. It shows burnt-out houses in Knysna and blackened surrounds stretching for 100km. But how much quicker could emergency services react if they were guided by drones able to pinpoint the hotspots and places where people were in danger? The disaster that engulfed this broad geographical area could have been made more manageable by the accurate pictures aerial surveillance can give.

The reality in SA is that, for now, the use of drones for civil and commercial activities is limited. That means the drone footage of the blazes sweeping over the coastal bush and forest was more likely a result of chance than any organised activity on the part of the local, regional or national government.

One can only wonder at the possibilities there may have been to preempt a disaster that will cost insurance companies more than R4bn in damages claims. The Garden Route catastrophe came at the same time that a highly irregular storm was battering Cape Town.

Insurance companies have subsequently warned of rising risk premiums as changing global weather patterns make life more uncertain. Just last week, United Drone Holdings, a local company that consults across the industry, held a three-day drone conference in Midrand, near Johannesburg, to explore the possibilities of these technologies in SA.

While drones are increasingly being used by private companies and governments, legislation is lagging in most countries.

CEO Sean Reitz says the value of commercial drone activities in SA is not easily defined. "A recent economic impact study estimated the SA market potential to be more than R2bn, with the capacity to add almost 25,000 jobs."

The country is having "an extraordinary increase" in the uptake of drone technology in mining, agriculture, safety, and security, with the SA Police Service also making use of drones.

"Cost varies from entry level drones from R25,000 to high-end mining units with specialised payloads at R3m," he says.

Reitz says drones are "fairly strictly" regulated in SA, but research from global consulting group PwC in May 2016 indicates the country still does not require a licence for flying beyond a visual line of sight, and insurance is still not required for commercial flights.

As circumstance would have it, PwC’s capital projects and infrastructure group had, a week before the Cape disasters, been on a roadshow in SA espousing the commercial use of drones.

The global consulting group says drones can help with costs, safety, transparency, operational efficiency, environmental compliance and risk management of capital projects, ranging from mining to construction and agro-processing.

Drones can also be utilised for sports and entertainment events, insurance and telecommunications, providing detailed images of people and machinery that can be used for exploration, mapping, surveying, planning and security purposes.

Perhaps, critically, they can also be used to prevent poachers from killing rhino and elephant, and any other of Africa’s apex animal species.

Unfortunately, drones are already widely used in warfare, in places such as the mountains of Afghanistan.

PwC says "advanced image analytics" is a future asset for heavy industry, saving substantial time and costs. Michal Mazur, PwC partner for drone-powered solutions, says that in 2013 Poland became the only country to provide comprehensive legislation for legalised drone flights. Little wonder, then, that PwC’s global drone activities are based in Warsaw.

"It’s a new technology and a tool to get a new perspective. There is this buzzword — ‘predictive analytics.' This is predictive analytics," he says.

Recovering from a disaster is costly. Recovering from two in one week is unprecedented.

Although insurance companies so far estimate the costs of the massive storm in the Cape and the devastating fires in the Knysna area to be between R3bn and R4bn, the cost is probably billions more if one takes into account damage to uninsured property, according to Janine Myburgh, president of the Cape Chamber.

“The only consolation is that the insurance payouts represent money being put to work in the Western Cape economy and that will mean work and jobs in the building industry and their supply chains. Most of the repair and rebuilding work will be done by small businesses,” said Myburgh.

“Unfortunately there will also be long-term damage to many industries such as our vital tourist industry.”

Myburgh said that overshadowing it all is the loss of life and the suffering endured by many thousands of people.

“No value can be placed on this, but at the same time, there have been wonderful examples of communities and businesses working together to help those in desperate need. The fortitude and generosity displayed are inspiring in a time of loss and depressing news,” she said.

Costs to Cape Town

Cape Town Mayoral Committee Member for Safety and Security and Social Services, Alderman JP Smith, commented about the storm experienced in the Cape Peninsula last week, saying that the City is unable to give a cost analysis because various City and other external stakeholders – using their resources – responded to this emergency.

“It’s also worth noting that mopping up operations are continuing. Regarding the City’s Winter Readiness Plan, all relevant line departments are on standby in the event of an emergency. Provision is made in the annual budget for any overtime costs associated with disaster relief operations,” said Smith.

“Regarding humanitarian relief, support is still being provided to just over 12 000 residents living in informal settlements in Nyanga, Khayelitsha, Philippi, Wallacedene, Pholeli Park, Imizamo Yethu, Macassar Village, Rasta Camp, and Riverside. No emergency sheltering is being utilised at this stage.”

The City has four non-governmental partners who provide humanitarian relief. Their costs incurred are recouped from the South African Social Security Agency.

Wind damage

According to Alexander Forbes Insurance (AFI), the impact of the fire and storms in Knysna has resulted in claims of about R22m for the fire, and under R1m for the storm. Damage from the storms has so far been more superficial – roofs, doors, tiles – with more extensive damage coming as a result of the fire.

Short term insurer Santam has received more than 1 000 claims following the damaging storm in the Western Cape with the majority of the claims related to wind damage. It also received some water damage claims.

The most severe damages are to large structures where roofs have been blown off and where buildings have collapsed. Santam treats more manageable claims digitally at this stage and has a team of desk-based assessors who are dealing with these claims.

Ebrahim Asmal, Santam’s executive head of claims and group sourcing, said following the damaging storm in the Western Cape, and the devastation caused by fires in the Southern Cape, Santam’s current focus remains on making sure that its clients get the necessary assistance regarding their claims.

“We are still in the process of gathering all the necessary information to give us a full picture of the impact of the catastrophe, and assessing the impact of these events on our business,” said Asmal.

In the greater Southern Cape and Port Elizabeth, Santam is dealing with some complete losses of houses and has established a temporary office at 16 Gray Street in the centre of Knysna.

“Our 24/7 claims and emergency helpline is taking calls, and we have dispatched assessors to join our catastrophe team and mobile assistance vehicles in Knysna. Our team is also assisting policyholders in the greater Southern Cape and Port Elizabeth,” said Asmal.

“We have also pledged a donation of R1m as immediate support to the disaster relief efforts following the Western Cape floods and the devastating fires in the greater Southern Cape region. Santam recognises that extreme weather events are increasing in intensity and occurrence as predicted by the climate change science and the rising urbanisation patterns of South Africa.”

Asmal said this poses serious risks to the stability and quality of human society and the global economy.

“We are therefore a strong advocate of the need to build local level resilience and risk protection,” he said.

Tourism businesses

Around 33 tourism related businesses in the Knysna region had been affected by the massive storm and fires in the area, Clive Bennet of Knysna Tourism told Fin24.

“At the same time our tourism businesses are continuing to operate, and we are still open for business. The residential section of town seems to have been more impacted than our businesses,” said Bennet.

Trent Read of Knysna Fine Art said many people had lost everything. The economy of “this once lovely place has suffered a hammer blow from which we will take years to recover”.

“Knysna Fine Art, who turns 20 this spring, is not immune to these hard times, although we somehow survived the flames. If you were to consider purchasing art from us for the next month, you would not only be adding to your collection but making an enormous difference to us and the greater Knysna community,” Read said in an e-mail letter to those on his mailing list.

“We will give half of any profit we make (in your name, if you wish) to community funds which include Knysna Animal Welfare, the Red Cross, and the Mayor’s Fund. We as a gallery, the wonderful artists we represent, and Knysna as a whole would be helped immeasurably by your actions.”

Enver Duminy, CEO of Cape Town Tourism, told Fin24 that the organisation stands in solidarity with colleagues in tourism across the Garden Route as they seek to recover after the devastating fires that have ravaged the region.

“We have reached out to them and offered our support and assistance. Having experienced in recent years the extended impact a natural disaster such as fire can have, we are aware of the effort it can take to return to normality as well as the cost of human lives and the economy,” said Duminy.

“We trust that as South Africans we will do all we can to assist in aiding those most affected and in restoring this beautiful region for locals and visitors.”

According to Sisa Ntshona, CEO of SA Tourism, the safety of all tourists is of paramount importance, and SA Tourism is working very closely with the Southern Africa Tourism Services Association (SATSA) which has people on the ground in the affected areas assisting travellers.

The annual IING Tenpin Bowling evening was held on 27 July at the Menlyn Entertainment area. 133 players entered the competition, and twelve teams competed against each other. This year all players were given animated character names, such as Snow White, Cars and Aladin, adding some extra flair and fun to the evening.

An evening like this would not be possible without sponsors. Thank you to OMI, Tracker, KingPrice, and Santam for their sponsorship. Also, a big thank you to all the players who helped us hosting once again a very successful bowling evening.

The bottom of the barrel prize went to the character “Andy” from the Santam team.

The Best player prize was won by “Triton” from team OMI.

Team Santam won the Booby prize.

The best-dressed team on the evening was C-Track, who won the third-place in the game.

OMI was the second-best.

Team Hollard won the 2017 IING Bowling championship with an average of 110,83. Well done!

We presented a successful second RE 1 and RE 5 Information and Preparation Session at the Santam offices in Pretoria on 16 June 2017 for 26 participants. We had great feedback on both the workshop and the facilitation. As a result of continued requests, the third session for 2017 will follow in September 2017. Details would be communicated on the IING website.

Participants came from various companies to attend the session and enjoyed the workshop immensely. Our IING training managed to attract attendees from other areas such as Tzaneen, Bethlehem, and Harrismith, where they appreciate our communications and regularly visit our website. The knowledge and skills gained from the session will benefit all to better prepare for the examinations.

Wynand Louw welcomed the delegates at the workshop and extended our appreciation and gratitude to Fatima Maharaj from Learnon for a very well-executed facilitation and unsurpassed knowledge.

Fatima welcomed the candidates and explained the examining bodies have four levels of difficulties: (1) Knowledge, (2) Comprehensive, (3) Application, and (4) Analysis for KI (1 years practical experience in the management). She explained the scenarios and tested the students’ knowledge and engagement through the session.

She also clarified the procedures with the Regulations, discussed the standards of the regulatory examinations, and provided additional information on the page numbers for KI and Rep. Furthermore, candidates could log in online and practice mock exams questions.

The Act talks about recognised qualifications and verifiable CPD programmes, 15 to 60 hours in three years cycle. The Qualifications are verified and checked by Inseta.

All of the best for everyone who still needs to write the examinations!